Justin Bullock, FISM News
California law makers passed a new budget for the state on Thursday. In that budget they include a record setting $4.8 billion to be spent combatting homelessness across the state. California represents the fifth largest economy in the world with a whopping $3.2 trillion gross state product (GSP) in 2019. While this amount is historic, it is proportional to the economy that California commands.
In fact, California recorded a cash surplus over the last year which many economists are attributing to COVID-19 stimulus money from the US federal government. The total California budget comes to $262.6 billion, so the amount being spent on initiatives addressing homelessness is around 1.75%. However, there is also an additional $11.75 billion directed toward housing not directly related to state homelessness programs and policies.
The way the $4.8 billion will be spent comes in two major categories. The first way is by sending $2.2 billion to local governments across the state. This will be distributed in correlation to need and population size. California has an established program that will be used to allocate the funds to local governments known as the Homeless Housing, Assistance and Prevention program.
The second way the money will be spent is by funding Project Homekey totaling approximately $2.6 billion. This initiative was previously established by California Governor Gavin Newsom. Much of this funding will come by way of the surplus cash California received from the Federal Government for the purposes of COVID-19 relief and stimulus. This program purchases hotels, motels and other vacant buildings in order to convert them into temporary and permanent housing for homeless populations.
The program also finances a small amount of subsidized rental properties and leases for people who would otherwise be homeless. This is extremely popular for mayors of large cities throughout California as homelessness is a major and underappreciated challenge. Whether or not this historic governmental spending will actually be effective at reducing homelessness across the state, however, is yet to be seen.